Compared to 2019, 37%
Increase in Sales and 82% Increase in EPS
Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for
the third quarter ended September 30, 2021.
Third Quarter Highlights:
($ in millions, except per
share data)
2021
2020
2019
2021 v 2019
Net Sales
$263
$161
$191
37%
Gross Margin
64%
61%
60%
400 bps
Operating Income
$68
$31
$37
85%
Operating Margin
26%
20%
19%
700 bps
Net Income attributable to IP
$38
$17
$21
84%
Diluted EPS
$1.20
$0.52
$0.66
82%
In light of the near cessation of business in the second quarter
of 2020, the Company is comparing its current nine month results
with those of 2019. For the first nine months of 2021, net sales
rose 25% to $669 million from $536 million in the same period of
2019. Year-to-date net income attributable to Inter Parfums, Inc.
rose 70% to $89 million compared to 2019’s $52 million. For the
nine months ended September 30, 2021 and 2019, diluted earnings per
share were $2.79 and $1.64, respectively, for an increase of
70%.
Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, “As
we reported last month, our largest brands, notably Montblanc,
Jimmy Choo, Coach, GUESS and Lanvin performed exceptionally well in
the current third quarter turning in gains of 26%, 40%, 98%, 27%,
and 37%, respectively, as compared to 2019’s third quarter.
Year-to-date, these brands generated sales increases of 11%, 39%,
56%, 44% and 12%, respectively, versus the first nine months of
2019.”
Discussing year-to-date growth in the Company’s major markets,
Mr. Madar stated, “North America, our largest market, leads the way
with sales up 140% and 67% compared to the same period in 2020 and
2019, respectively. Gains were also achieved in Western Europe
where sales rose 38% and 6% from the first nine months of 2020 and
2019, respectively. Thus far this year, sales in Asia are running
72% and 10% ahead of 2020 and 2019. Other markets including the
Middle East, Central and South America and Eastern Europe achieved
substantial sales gains over 2020 and only the Middle East did not
surpass 2019 sales levels.”
On the subject of plans for 2022, Mr. Madar continued, “In the
coming year, an extensive new product pipeline is in the works. Our
debuting scents for Moncler, Moncler Pour Homme and Moncler Pour
Femme will rollout in early 2022 to thousands of doors, accompanied
by a full-scale advertising and promotional campaign. We’ve
recently previewed the scents in several hundred doors and the
sell-through has been overwhelmingly positive. New men’s fragrance
pillars are debuting for Coach, GUESS and Boucheron.”
He continued, “Over the years, we’ve gotten excellent mileage
from brand extensions and that’s what we are looking for in 2022
when we introduce flankers for Montblanc Legend, the Coach women’s
signature scent, Jimmy Choo’s I Want Choo, GUESS Bella Vita, and
Lanvin Éclat d’ Arpège. Of course, two of the leading growth
catalysts arise from our newly signed license for Ferragamo, which
went effective on October 1, 2021, and the addition of the Donna
Karan and DKNY fragrance brands that commences next July.”
Russell Greenberg, Executive Vice President and CFO noted, “In
many respects, the third quarter was exceptional. The intensity and
duration of our sales rebound was far better than we could have
anticipated and for that reason, we raised 2021 guidance three
times. Since we postponed most of the 2020 product launches until
2021, we had sufficient inventory, despite supply chain
disruptions, to meet strong demand and achieve outstanding top line
growth. While the weakness in the dollar relative to the euro would
normally depress gross margin, product mix changed that equation.
Our current third quarter had a larger proportion of sales of high
margin new products that more than offset the negative currency
effect.”
He went on to say, “Since sales exceeded expectations throughout
2021, our year-to-date promotion and advertising expense included
in selling, general and administrative only aggregated 14.2% of net
sales, well below 17.3% in 2019. This enabled us to achieve a
year-to-date operating margin of nearly 24%.”
Guidance
Mr. Greenberg pointed out, “The holiday season started earlier
this year as our customers placed much of their requirements for
delivery in the third rather than the fourth quarter to lessen the
effect of supply chain issues. As previously reported, for the full
year, we have budgeted 21% of net sales for promotion and
advertising expense, or approximately $170.1 million based upon on
current guidance, implying $95 million in the fourth quarter. The
big push in promotion and advertising is now underway and will
continue throughout the fourth quarter with major campaigns
throughout the world to support retail sell-through during the
holiday season for our leading brands and recent product launches.
By making this monumental investment in advertising and promotion
encompassing print and broadcast media as well as online
advertising and billboards, we expect large scale reorders in the
coming year accompanied by a significant gain in market share. As a
reminder, we expect 2021 net sales of approximately $810 million,
resulting in diluted net income per share of $2.35. Guidance
assumes that the average dollar/euro average exchange rate remains
at current levels and there is no significant resurgence of the
COVID-19 pandemic. We are planning to release initial 2022 guidance
later this month.”
Mr. Greenberg continued, “We closed the third quarter with
working capital of $491 million, including approximately $324
million in cash, cash equivalents and short-term investments, and a
working capital ratio of 3.3 to 1. The $126.6 million of long-term
debt relates to the Interparfums SA headquarters acquisition, which
was financed by a 10-year €120 million (approximately $139 million)
bank loan. Cash provided by operating activities aggregated $101.3
million for the nine months ended September 30, 2021, as compared
to cash used in operating activities of $20.2 million for the
corresponding period of the prior year.”
Dividend
The Company’s regular quarterly cash dividend of $0.25 per share
will be paid on December 31, 2021 to shareholders of record on
December 15, 2021.
Conference Call
Management will conduct a conference call to discuss financial
results and business developments at 11:00 AM ET on Tuesday,
November 9, 2021. Interested parties may participate in the call by
dialing (201) 493-6749; please call in 10 minutes before the
conference call is scheduled to begin and ask for the Inter Parfums
call. The conference call will also be broadcast live over the
Internet. To listen to the live call, please go to
www.interparfumsinc.com and click on the Investor Relations
section. If you are unable to listen live, the conference call will
be archived and can be accessed for approximately 90 days at Inter
Parfums’ website.
Founded in 1982, Inter Parfums, Inc. develops, manufactures and
distributes prestige perfumes and cosmetics as the exclusive
worldwide licensee for Abercrombie & Fitch, Anna Sui,
Boucheron, Coach, Dunhill, Ferragamo Graff, GUESS, Hollister, Jimmy
Choo, Karl Lagerfeld, Kate Spade, MCM, Moncler, Montblanc, Oscar de
la Renta, S.T. Dupont and Van Cleef & Arpels. Inter Parfums is
also the owner of Lanvin fragrances and the Rochas brand. Through
its global distribution network, the Company’s products are sold in
over 120 countries.
Statements in this release which are not historical in nature
are forward-looking statements. Although we believe that our plans,
intentions and expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such
plans, intentions or expectations will be achieved. In some cases
you can identify forward-looking statements by forward-looking
words such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "should," "will," and "would," or
similar words. You should not rely on forward-looking statements,
because actual events or results may differ materially from those
indicated by these forward-looking statements as a result of a
number of important factors. These factors include, but are not
limited to, the risks and uncertainties discussed under the
headings “Forward Looking Statements” and "Risk Factors" in Inter
Parfums' annual report on Form 10-K for the fiscal year ended
December 31, 2020 and the reports Inter Parfums files from time to
time with the Securities and Exchange Commission. Inter Parfums
does not intend to and undertakes no duty to update the information
contained in this press release.
See Accompanying Tables
CONSOLIDATED STATEMENTS OF
INCOME (In thousands except per share data) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net sales
$
262,696
$
160,637
$
668,797
$
354,967
Cost of sales
95,269
63,439
243,772
141,883
Gross margin
167,427
97,198
425,025
213,084
Selling, general and administrative
expenses
99,788
65,841
262,379
169,471
Impairment loss
--
--
2,393
--
Income from operations
67,639
31,357
160,253
43,613
Other expenses (income):
Interest expense
1,697
148
3,344
1,510
(Gain) loss on foreign currency
(613
)
891
(2,169
)
(76
)
Interest income
(233
)
(393
)
(1,388
)
(2,154
)
Other income expense
(36
)
--
(135
)
--
815
646
(348
)
(720
)
Income before income taxes
66,824
30,711
160,601
44,333
Income
taxes
16,997
8,859
45,112
12,165
Net income
49,827
21,852
115,489
32,168
Less: Net income attributable to the
noncontrolling interest
11,511
5,314
26,854
8,688
Net income attributable to Inter
Parfums, Inc.
$
38,316
$
16,538
$
88,635
$
23,480
Earnings per share:
Net income attributable to Inter
Parfums, Inc. common shareholders:
Basic
$
1.21
$
0.52
$
2.80
$
0.74
Diluted
$
1.20
$
0.52
$
2.79
$
0.74
Weighted average number of shares
outstanding:
Basic
31,659
31,533
31,648
31,531
Diluted
31,807
31,619
31,793
31,651
Dividends declared per share
$
0.25
--
$
0.75
$
0.33
CONSOLIDATED BALANCE
SHEETS (In thousands except share and per share data)
(Unaudited)
ASSETS
September 30, 2021
December 31, 2020
Current assets:
Cash and cash equivalents
$
174,848
$
169,681
Short-term investments
149,192
126,627
Accounts receivable, net
193,868
124,057
Inventories
156,025
158,822
Receivables, other
3,951
1,815
Other current assets
24,626
16,912
Income taxes receivable
1,448
2,806
Total current assets
703,958
600,720
Buildings, equipment and leasehold
improvements, net
142,823
19,580
Right-of-use assets, net
31,428
24,734
Trademarks, licenses and other
intangible assets, net
203,961
214,108
Deferred tax assets
6,916
8,041
Other assets
37,465
22,962
Total assets
$
1,126,551
$
890,145
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
15,025
$
14,570
Current portion of lease liabilities
6,128
5,133
Accounts payable – trade
46,874
35,576
Accrued expenses
117,775
95,629
Income taxes payable
26,547
5,297
Total current liabilities
212,349
156,205
Long–term debt, less current
portion
126,636
10,136
Lease liabilities, less current
portion
27,771
21,354
Equity:
Inter
Parfums, Inc. shareholders’ equity:
Preferred stock, $.001 par; authorized
1,000,000 shares; none issued
--
--
Common
stock, $.001 par; authorized 100,000,000 shares; outstanding
31,722,300 and 31,608,588 shares at September 30, 2021 and December
31, 2020, respectively
32
32
Additional paid-in capital
83,070
75,708
Retained
earnings
569,354
503,567
Accumulated other comprehensive
loss
(29,322
)
(5,997
)
Treasury
stock, at cost, 9,864,805 shares at September 30, 2021 and December
31, 2020
(37,475
)
(37,475
)
Total
Inter Parfums, Inc. shareholders’ equity
585,659
535,835
Noncontrolling interest
174,136
166,615
Total equity
759,795
702,450
Total liabilities and equity
$
1,126,551
$
890,145
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211108006077/en/
Contact at Inter Parfums, Inc. Russell Greenberg, Exec. VP &
CFO (212) 983-2640 rgreenberg@interparfumsinc.com
www.interparfumsinc.com
-or-
Investor Relations Counsel The Equity Group Inc. Devin Sullivan
(212) 836-9608/dsullivan@equityny.com Linda Latman (212)
836-9609/llatman@equityny.com www.theequitygroup.com
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